Kremlin administration chief says high oil prices were Russia’s curse

The current level of oil prices and the exchange rate of the national currency, the rouble, are ideal for launching structural reforms, Sergei Ivanov said

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MOSCOW, June 21. /TASS/. High oil prices were Russia’s curse rather than blessing whereas the current level of oil prices and the exchange rate of the national currency, the rouble, are ideal for launching structural reforms, Kremlin administration chief Sergei Ivanov said in an interview with the Financial Times newspaper published on Sunday.

He said there were two different points of view on oil prices. "One says that Russia’s richness in mineral resources, primarily oil, is a blessing for Russia. There is a different point of view, to which I subscribe, that mineral resources wealth and in particular high oil prices, is not a blessing but a curse for Russia, " he said, adding that in the 2000s, when oil process had been very high there was next to no motivation for carrying out structural reforms and diversifying the economy.

"But now, I believe, with the oil price somewhere above US$60 per barrel and the rouble around 55 to the dollar, that is an ideal ratio and it is time to engage in structural reforms right now," Ivaniv said.

He admitted that Russia had needed structural reforms long before the sanctions were imposed. He also admitted that the sanctions had done "a certain damage." "As the most painful I would single out the decline in real incomes of the population and, as a consequence, the fall in consumer demand," he added.